Dorian LPG Ltd. (NYSE:LPG) Q4 2026 Earnings Call Transcript

Dorian LPG Ltd. (NYSE:LPG) Q4 2026 Earnings Call Transcript May 20, 2026

Dorian LPG Ltd. beats earnings expectations. Reported EPS is $1.89, expectations were $1.41.

Operator: Good morning, and welcome to the Dorian LPG Fourth Quarter and Fiscal Year 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. Additionally, a live audio webcast of today’s conference call is available on Dorian LPG’s website, which is www.dorianlpg.com. I would now like to turn the conference over to Ted Young, Chief Financial Officer. Thank you, Mr. Young. Please go ahead.

Theodore Young: Thanks, Madison. Good morning, everyone, and thank you all for joining us for our fourth quarter 2026 results conference call. With me today are John Hadjipateras, Chairman, President and CEO of Dorian LPG Limited; John Lycouris, Head of Energy Transition; and Tim Hansen, Chief Commercial Officer. As a reminder, this conference call webcast and a replay of this call will be available through May 27, 2026. Many of our remarks today contain forward-looking statements based on current expectations. These statements may often be identified with words such as expect, anticipate, believe or similar indications of future expectations. Although we believe that such forward-looking statements are reasonable, we cannot assure you that any forward-looking statements will prove to be correct.

These forward-looking statements are subject to known and unknown risks and uncertainties and other factors as well as general economic conditions. Should 1 or more of these risks or uncertainties materialize or should underlying assumptions or estimates prove to be incorrect, actual results may vary materially from those we express today. Additionally, let me refer you to our unaudited results for the quarterly and annual periods ended March 31, 2026, that were filed this morning on Form 8-K. In addition, please refer to our previous filings on Forms 10-K and 10-Q, where you’ll find risk factors that could cause actual results to differ materially from those forward-looking statements. Please note that we expect to file our full 10-K no later than May 29, 2026.

Finally, I would encourage you to review the investor highlight slides posted this morning on our website. With that, I’ll turn over the call to John Hadjipateras.

John Hadjipateras: Thank you, Ted, and thanks for joining us today. My colleagues will share some useful and interesting information about the past quarter and our views of the market. First, I’d like to say a few words on capital allocation and provide some historical context on fleet development, which relates to risk management and a volatile market with a view to capturing upside. Today’s price of a new building VLGC had approximately $115 million reflects an increase of approximately 2.5% permenant over the course of our first VLGC and which was delivered to our predecessor company 20 years ago. She was ordered for a price of approximately $65 million in 2004. Wenche was delivered in 2006, the new building replacement cost was over $90 million.

From 2009 to 2012, the newbuilding price hovered in the low $70 million range and the next order we placed was in 2012 for advanced Echo type series at just under EUR 70 million each. The new building prices stayed under $70 million range until 2021. The total VLGC fleet in 2005 comprised 102 ships. Today, the total fleet is 427 VLGCs, and there are about 124 ships on order, representing nearly 30% of the existing fleet compared to the all-time high of more than 50% in 2007. Our owned fleet comprises 18 echo type with efficiency enhancing features and 2 new dual fuel ships. The average age of our fleet is 10.3 years. In the next few years, we hope to expand our fleet by adding new ships and expect that the catalyst of our — for our investment in replacement tonnage will be innovation in the design and efficiency of new buildings.

The advent of ultra-long stroke electronic engines informed our investment decision in 2012 and the development of dual fuel engine supported our decisions for our investments in the capital markets delivered in 2023 and via Rio delivered a couple of months ago. We have witnessed the volatility I’ve described, and we’ve been the beneficiaries of a tremendous increase in the volume of seaborne trade of LPG in both absolute terms and in ton mile terms. We have confidence in the further expansion of this trade. And our intention is, as always, with our capital allocation to proceed judiciously mindful of our step-based to maintaining a solid balance sheet. We believe that this is the roof by which we can earn the best returns for our investors and continue to provide top-quality services to our customers and a safe and fair working environment for our people at sea and onshore.

And now I’ll pass you on to Ted.

Theodore Young: Thanks, John. My comments today will focus on capital allocation, our financial position and liquidity and our unaudited fourth quarter results. We’ve been active since the beginning of calendar 2026 and growing our business and rewarding shareholders. First, we took delivery of the Aireon in late March, our fully ammonia capable of 93,000 CBM VLGC. As you would expect, she immediately started contributing to earnings though we won’t see the P&L impact until the first quarter of our fiscal 2027. The most recent irregular dividend of $1 per share, a significant increase from the prior quarter’s reflected the strong underlying market and our Board’s commitment to creating shareholder value. Second, we completed the sale of the 2015 build COBRA in May, paying off $16.5 million of debt in the process.

We expect to generate a gain on sale of approximately $30 million from her sale. And I would note that our sale price was actually greater than her contract price in 2015. Finally, we will complete the repurchase of the Corsair for her sale leaseback before month end, which will require a payment of about $24.2 million in total and positions us to be flexible with any potential opportunities. At March 31, 2026, we reported $327.4 million of free cash, which was sequentially up from the previous quarter. Cash flow from operations was $82 million or nearly $2 per share and as we noted in our press release, we borrowed $62.9 million upon closing of the delivery of the Aireon, covering the final payment to the yard. As we disclosed then, the Arian loan has 2 tranches, 17 years and 112 years over 10 years and a weighted average on margin in to 125 basis points over SOFR.

We closed the fiscal year, therefore, with a debt balance of $565.8 million, but given the payoff of the debt in connection with the sale of the Cobra and the Corser repurchase, the pro forma balance would be $524.7 million. Based on our stated book, however, at quarter end of $565 million of debt, our debt to total book cap stood at 33.2% and net debt to total cap of 14%. We continue to have well structured and attractively priced debt capital with a current all-in cost of about $5 million, an undrawn revolver of $42.9 million and 1 debt-free vessel. Coupled with our strong free cash balance, we have a comfortable measure of financial flexibility. We expect our cash cost per day for the coming year to be approximately $26,000 per day, excluding capital expenditures for the dry docking of the Kapan John which is currently planned for our fourth fiscal quarter.

For the discussion of our fourth quarter results, you may find it useful to refer to the investor highlight slides posted this morning on our website. I remind you that my remarks will include a number of terms such as TCE available days and adjusted EBITDA. Please refer to our filings for the definitions of these terms. Looking at our fourth quarter chartering results, since our entire spot trading program is conducted through the Helios Pool, its reported spot results are the best measure of our spot chartering performance. For the March 31 quarter, the Helios Pool earned a TCE per day for its spot and COA voyages of 65,600 per day, reflecting more favorable VLGC market conditions. Our utilization improved sequentially to 78% this quarter from 94.6% in the prior quarter as the last of our drydockings for the 2014 to 2016 class was completed.

The overall TCE result for the pool of nearly 63,300 per day reflects that very strong rate environment as well as our time charter portfolio. On Page 4 of our investor highlights material, you can see that we have 6 story and vessels on time charter within the pool, indicating spot exposure of just over 80% of the 31 vessels in the Helios Pool. Dorian’s reported TCE revenue per available day for the quarter was about $63,615, which is the second highest TCE rate we have earned in our corporate existence. For the year, we earned 52,238 per day, with the fourth quarter completely offsetting our sector’s relatively slow start to the fiscal year. The current rate environment remains healthy. So Panama Canal transit fees are having an impact on realized rates.

We’d note that most posted rates — TCE rates do not include auction fees for VLGCs transiting the canal, which have ranged from $200,000 to as high as $4 million in the last weeks. And also, they do not include the effect of ballasting around the Cape of Good Hope, which can also have a significant impact on realized TCEs. We plan to issue our forward booking information in the near future. Daily OpEx for the quarter was $9,548 excluding drydocking related expenses, which was virtually flat with the prior quarter’s $9,558. Our gross time charter in expense for the 6 TCN vessels came in at $18.4 million or about $34,100 per TCN day, thus, those vessels contributed positively to our quarterly profits. As a reminder, the profit-sharing expense on our P&L represents MOL Energia’s portion of the net chartering profit as the charter hire earned less the charter higher expense on the BW Tokyo.

Total G&A for the quarter was $13.3 million in cash G&A, which is G&A excluding noncash compensation expense, was about $11 million. This amount included accruals under our bonus plan of $3.5 million, the payment of which is subject to completion of our annual audit, $200,000 of statutory noncash accruals and about $300,000 of free delivery costs related to the area. Excluding those amounts, our G&A was about $7.1 million, which reflects a level that we believe is sustainable for the near term. Our reported adjusted EBITDA for the quarter was $106.6 million. Total cash interest expense for the quarter was $6.6 million, which is down sequentially from the prior quarter. Principal amortization remained steady at around $13 million. We expect the full quarter interest cost of the Aireon to be approximately $800,000 in the coming quarter.

The regular dividend declared at the beginning of the month of $1 per share is our 19th and brings to $1.65 per share in a regular dividend that we have paid since September 21. The increase in the dividend versus the prior quarter is consistent with our previous discussions around the topic reflects a balanced mix between results and the long-term needs and prospects of the business. Including the irregular dividend to be paid this month, we have paid nearly $770 million of dividends have generated net income of $835 million since June 30, 2021, which is the quarter immediately prior to our first regular dividend. As we’ve discussed, our Board waste current earnings, our near-term cash forecast, future investment needs in the overall market environment among a number of factors in making its determination of the appropriate level, if any, for our dividend.

As John Hadjipateras has already mentioned, our sector can be a volatile one, and our dividend policy needs to reflect that. The $1 per share irregular dividend certainly reflects a constructive market outlook while also allowing the company the flexibility for future fleet reinvestment. We continue to be on the lookout for fleet renewal opportunities and we’ll be judicious with our free cash flow, working to balance shareholder distributions, debt reduction and fleet investment. With that, I’ll pass it over to Tim Hansen.

Tim Hansen: Yes. Thank you, Seth, and good day, everyone. The quarter ended March 31, 2026 ultimately carried the positive momentum from the quarter prior and saw higher freight in digital for the VLGC freight markets. I closed my remarks from the quarter prior about likely cupolitical impacts and the GC market’s ability to derail to capture the opportunities that arise from such challenges. We believe both have materialized and that the company has been a key actor in that story. The quarter ending March 31, 2026, especial on the topline periods before facilities in Iran started and the period after facilities commenced and to look at them separately. While global seaborne LPG transport was down for the quarter to levels not seen since the first calendar quarter in 2024, the decline was driven by the de facto closure of the Strait of Hormuz of homes decline last the result of record high production levels from the North America, which hit a new record high of exports near the 20 million tonne mark.

The favorable fundamentals of LPG production and accompanying seaboard transport prior to the closure of Strait of Hormuz further supported our first calendar quarter, seeing a wise West-East arbitrage and persistently high freight activity levels. This does not mean that freight markets only saw smooth sailing, however. Price on the closure of the state foremost industry players was analyzing potential impacts from the removal of President Martin idea my very kind of concerns brought on by the regrithreatening the end of the nature and the U.S. Supreme court striking down refer tariffs. It is not uncommon to see softness in the first calendar quarter in the freight markets with lower activity when the imports reduced imports spring approaches or due to a slowdown in the Far East around the Lunar New Year holidays.

This was not the case in 2026. Activity was strong through the holiday season to compensate for the disruptions we saw in October, November during the port service feedback between the U.S. and China. Furthermore, the winter in the Far East was longer in cold, while coal snaps in the North America was not severe enough to weaken production levels. The rest are charge was there for flying and the TC freight was supported by the fundamentals. There were significant challenges to capture the value in the market, however, and periods of uncertainty because of developments in Media protesting in Iran and varies about nature creation. While none of these factors imply directly impacted the VPG market, the macroeconomic picture was certainly complicated.

If 1 described to the argument that more internationally tradable Venessa Deno was positive for the world economy — economy-heav if the Chinese economy will suffer by losing net monopoly access to low-priced intraband crude oil. If 1 believes that the process in Iran will table the static republic and lead to softening sanctions, the likelihood of significant and dramatic scrapping of the shadow fee will open models of vessel supply. Right through the Supreme Court decision to strike down our per tariffs these geopolitical events, even if not directly impacting the VLGC freight market for long periods, ensure that the market plays remained active at the best to consider the upsides and the risks the period before the session mini was marked by positive have to see fundamentals with value captured by an attentive and active market.

Once Iran was formed and thereafter retaliated against the Gulf neighboring countries, a new uncomplicated dynamic emerge for the VLGC market. The effect of the regional conflict are felt worldwide and through all parts of the economy. I’ll focus on the new few key aspects that directly impacted the VLGC markets over the relevant quarter and through April. Regarding freight levels, they have been mostly higher after the closure of the trade of almost, although it was a consistent increase panel windows of belief that the Strait of Hormuz will open more vessels will hold back from balancing to the west and oversupply the Western market. And during other periods, there was 0 belief in the straight opening and more vessels supply was available in the best high freight has not been disrupted to the average as that widened dramatically on the back of importing nation facing shortages.

The Far East index was bid up and import demand kept the upward open. The fear of shortages back to the bunker market and the key bunk approach. Currently, prices have normalized and concerns of stock to supply less immediate. For to March, some boards saw doubling of course, some countries and the bunkering services to prevent also preserve energy stocks. And even to this day from when storage tank will be portal hidden we give, the physical export capacity in question. The higher freight markets on the back of the white open West supercharge was further supported to cover the high band of expenses for shipowners. 2 additional external factors resulting from the Iran conflict at further freight levels. Trade lanes have had to recalibrate and this show success resulting in Domain miles.

The VLCC market already demonstrated a plenty to readjust quickly after the roses legal war on Ukraine and through periods of tariff wars and have delivered again now with minimal ability to supply, for example, India from the Middle East there’s been a greater flow of cargoes from the U.S. to China. The length of voyages and port turnaround uncertainty have tightened the market. The Panama Canal has contributed to absorbing vessels of power resulting in significantly higher Panama costs with the increase in auction fees. This is mostly due to all goods and commodities, including LPG seeing high deliver price in the Far East segment that previously saw less urgency to get to ratio quickly through the Panama Canal, return to use the Canal and congestion has been on a steady increase since the bottoming of comments.

The impact of an increasingly congested Panama Canal persists to this current calendar call as well, continuing to keep the ability — availability of vessels tight and the freight market is high. With that, I will pass it over to Mr. John Lycouris.

John Lycouris: Thank you, Tim. At Dorian LPG, we remain committed to continually enhancing energy efficiency and promoting the sustainability of both our operations and of our vessels. We currently operate 16 scrubber-fitted vessels and 6 dual fuel LPG vessels after taking delivery of the VLGC lac area. Higher oil prices in March due to the Middle East conflict and the subsequent blockage of the stator moves led to higher bunker price differentials, which are the score the important subscribers and our fuel efficiencies efforts. . Rubbers neutralized sulfur oxides from fuel oil, while significantly reducing particulate matter in ply carbon emissions when compared with conventional VLSFO, very low sulfur fuel oils. For the fourth fiscal quarter of 2026, our scrubber vessel savings amounted to about $3,482 per day per vessel, net overall scrubber operating expenses.

Fuel differentials between high sulfur fuel oil and very low sulfur fuel oil averaged $89 per metric ton, while that of LPG as fuel versus very low sulfur fuel oil stood at about $205 per metric ton, making LPG economically attractive for our dual fuel vessels. We have now completed the statutory special survey and docking cycles of our 2014, 2016 class of vessels with the last vessel completing her special survey during this past quarter. As previously announced, Dorian LPG took delivery in March, the 93,000 cubic meter dual-fuel newbuilding Areon from Hanwecean. The range fuel ship, which can operate on LPG and fuel oil and fit to carry 4 cargoes of LPG and/or ammonia. When operating on LPG, CO2 emissions are approximately 20% lower while sulfur oxides particular matter and other pollutants are significantly reduced.

With this second wholly owned dual fuel LPG vessel, 20% of our fleet now runs on low-emission alternative euros. Area is also fitted with a hybrid scrubber capable of closed-loop operation for restricted ports and for the emission control areas. Our March press release provides additional details on the ships operating capabilities and our advanced technologies. MEPC 84 concluded the discussions of the IMO NetZero framework without resolving the Net Zero framework final form and/or its adoption time table. Alternative proposals emerged during the meeting to amend the proposed framework, but the lack of sufficient support for any single alternative has stalled progress on the Nets framework. The IMO affirmed its preference for a global regulatory approach rather than a fragmented regional — the fragmented regional measures.

If the net 0 framework is adopted at MPC 85 in December 2026, it would then do into for 2028, and its first reporting year is likely to be in 2029. However, several key issues remain under negotiation, including the GFI targets, compliance mechanisms, the role of the IMO Zero fund, fewer certification rules and how that framework will align with existing CII and Cemp regulations. Another outcome from the MEPC 84 included the adoption of the Northeast Atlantic ECA, which will introduce stricter sulfoxide, particulate matter and NOx requirements from 2027 onwards. We are confident that the Dorian LPG fleet will be prepared to meet regulatory changes in the future. And now I would like to pass it over to John Hadjipateras for his final comments.

John Hadjipateras: Thank you, John. And Madison, if you have — if we have any questions, we’re ready to take them. .

Operator: [Operator Instructions] And we will take our first question from Omar Nokta with Clarkson Securities.

Q&A Session

Omar Nokta: John, Tim and John, thanks for the update. It sounds like, clearly, a lot of stuff is happening. You’ve had a nice quarter and the next 1 looks like it’s going to be off the charts. So I just have a couple of questions. Maybe just first, it looks like you’ve taken advantage of a pretty good market here to put some ships away on term charter as you highlighted. I think it’s been a while since we’ve seen you add perhaps this much in duration. So I just wanted to get a sense, what’s your appetite to do more of that I guess, perhaps maybe for both you and the charter, what the desire look like to add more TC coverage? And then are you willing to disclose any of the terms in terms of day rate?

John Hadjipateras: Thank you, Omar. Well, we’ve disclosed as much as I think we’re entitled to disclose under the contracts that we have. As regard our future appetite, it really is rate dependent. There’s always this element in a very high spot market where you’re giving up the immediate earnings to get the length at the back end. And or — I think we have a balanced view. I mean we’re not scared with the spot market, but we — if the rates are right for cover, we’re happy to take more cover as well. I know this isn’t very precise, but it’s kind of a general idea of where we’re at in terms of our approach to the chartering on term. .

Omar Nokta: Okay. I appreciate it, John. That’s helpful. And I guess maybe, I think, Ted, you were discussing sort of the spot market at the moment in terms of, say, rates and how they’re not perhaps indicative of true earnings when you take into account some of the costs at the Panama Canal, whether it’s the auction fee or maybe the wait time or the diversion. Do you care to maybe give a sense of, hey, headline rates today say they’re at $170,000 per day. What would you say is like the true real earnings that are being captured? Any sense you’re willing to or able to share?

John Hadjipateras: Yes. I think Tim can answer that question. Yes, Tim, do you want to take a shot?

Tim Hansen: Yes, it’s fluctuating quite a lot. I mean if you you see the auction fees, for example, on the Panama run went up to EUR 4 million. So if you divide that over 60 some day onwards you were kind of like reducing your TCEs with 60,000 plus a day, right? But not all hit that. So it’s varying quite a lot also be balanced around the Cape, you have a longer it, so you have to spread out the savings launch on freight on more days, which will drop the result even without pricing the — or anything by by maybe a $10,000 a day and large even you get shots on the Panama, you most likely wait a few days because you don’t want to jeopardizes running later your slots because you will never get into the first idle time. So it’s depending on what trades you would take, but what you will see as time value is high. the 10, 20 — 30,000 below the highlight rate.

Omar Nokta: All right. So it still has the 100-plus number. .

Tim Hansen: And course, yes. Yes. .

Omar Nokta: And then maybe just a last 1 for me, maybe just kind of on the point of the U.S. export market because there’s been a lot of discussion on Panama Canal and the diversions. I guess just generally, just given what’s going on in the market here over the past 3 months, almost 3 months. Has the VLGC trade, and I guess, your business specifically, has it just completely shifted now to a pure U.S. exposure? Or are there other areas where you’re active where there’s cargoes to be taken.

Tim Hansen: For us, as Heloise part from the time where we saw neighbor ships heading towards the Gulf, we decided to stay away. So we always feel like very focused on the U.S., so up to 80% of our business are liftings. And if you count the base with the longer varies, maybe 90% of our coverage has been focused on o U.S. But today, it’s basically so U.S. and Canada, U.S. on the West Coast, where we do not touch — we do fix the occasional West African voyage, of course. And if someone wants to pay for the shows would look at that, but, yes. I would say, U.S. kind of. .

Operator: And we’ll move next to Stephanie Moore with Jefferies.

Unknown Analyst: Hi, good morning. Thank you for the question. Maybe just a follow-up to the last kind of string of questions here. A great really strong quarter. It looks like the next quarter is going to be quite robust. — given the underlying environment. So with that as the backdrop here and what remains really strong cash generation, and obviously, a really constructive outlook. Could you just maybe talk to us about how you are prioritizing capital allocation across the dividends, deleveraging, fleet expansion, especially in this environment, an update there would be helpful. .

John Hadjipateras: Thank you, Stephanie and welcome to covering our sector. Yes, I’m going to hand over to Ted to give you an answer on that. .

Theodore Young: Yes. Stephanie, I think look, it’s a bit of a dynamic balancing act. As you know, our debt amortizes pretty steadily and most of it is very attractively priced. So we haven’t seen a need to proactively manage prepaid debt, the dividend is obviously an important part of the story for investors. And we continue to make that center piece in, but it’s on in. We have real order in the pie always have been. So it’s a little different than some other sectors, say, midstream where it’s a little bit easier to quantify how you’re going to break things out. And I think from our perspective, it’s a bit fact and circumstance dependent. But we are looking for those opportunities for fleet reinvestment as our fleet gets up in age.

It’s still a great fleet age. It still has great technology. But I think if we saw a great opportunity to acquire a meaningful fleet, we would do it. And if that came — if we felt that we had to have some impact on the dividend, we’d have to look at that. On the other hand, — it’s a really big part of the total shareholder return story. And we care about it as shareowners. It’s a big part of our incentive share program here. So there’s a lot of driving forces to maintain a reponderance of focus on the dividend as we go ahead.

Unknown Analyst: I appreciate that. That’s very helpful. And then maybe just a high-level question, as you think about — I would love to get your thoughts on just your outlook for LDL PG sector for 2026, especially maybe if you touch on, we do see fire a bit of normalization in the Middle East, how you’re kind of viewing the impact on the overall sector would be helpful. That’s it.

Theodore Young: Actually, Tim, do you want to take a shot at that?

Tim Hansen: Sorry, what you want reserve .

Theodore Young: So Stephanie asked about what our views were on the post Middle East stabilization view of the LPG trade, which I’m passing me because it’s a really hard question.

Tim Hansen: I mean it’s really depending on when it will happen because even though we are publishing now from the longer haul in the U.S. has managed to produce much more for exports. The LPG is still in short supply in the world, and we are seeing if it lasts for longer, it will result in demand destruction. We also don’t know exactly the held badly hurt the Middle East is on their ability to export once it comes back open. So do we expect at the moment, whether by the opens, we will probably see more vessels available with the ships captured in the Middle East available in the market, and it will be a little bit of time before the export ramps up again. So you could see a bit of an oversupply shift at that point. But it’s really depending on where the system position at the time and how people perceive the ability of the Middle East and exporters to ramp up again and whether they would both shifts back to the Middle East or not, but …

John Hadjipateras: Thanks, Stephanie, as a general remark, I’ll just tell you that our what we try to do all the time is planned for the worst and hope for the best. And I think the worst outcomes are so varied that it’s impossible really to have cap the mall, but we try. — and we’re hoping for the best. And at the moment, we’re enjoying a good run. And I think that kind of encapsulates what we’d like to say on the subject right now. .

Unknown Analyst: Yes. No, I appreciate it. You didn’t mean to give you such a nuanced question there, but the insight is very helpful. And thank you for the time. .

Theodore Young: Thanks, Stephanie. Thank you saving.

Operator: [Operator Instructions] And we’ll move next to Clement Mullens with value investors edge.

Climent Molins: Tim, you talked about the Panama Canal and the impact that increased transit has had on auction pricing. Does this apply to both the old and the new locks or especially on the latter? And secondly, can you comment on the percentage of VLGC’s transit that heading towards the Far East have decided to avoid the canal?

John Hadjipateras: Good. Tim, can you add to that one, please? .

Tim Hansen: Yes. So the auction fees at the moment is the impact is on the new canal. There has been some increases on the old Cana as well or the old drugs, but not to any comparable effect. So it’s mainly the new canal, you could see some auction fees on the old can come in or as there’s probably some repairs and maintenance in June. So that can change. But at the moment, the increases we have seen is on the auction fees on the new canal. With regards to routing, we see more and more people routing cap and be the same as we have experienced the high canal cost, but it’s a moving situation. It went so that elastomer million trying to later. So — so that time it would already be on the ballast leg towards the Panama. So your target side and evaluating the risk or taking the changes over there.

Climent Molins: Okay. very helpful. year-on-year. I mean for the year — has line authority build more flexibility to tackle this, should we see a repeat of the El Nino and little rain in the region? Or should that happen, do you believe that we would see, let’s say, a repeat of what we saw a couple of years ago?

Tim Hansen: I think they learned a lot the case in by being able to retain more and that does have less flocks of the border, but they cannot prevent it. So we will see a result of this if the which is likely to — or 7% or whatever it is likelihood at the moment. would happen over a longer period. We will see reduced draft in the Panama, but not — maybe not to the extent as through.

Unknown Executive: Thank you very much. Madison, I think we can close. And thank you, everyone, for your interest, and see you next quarter.

Operator: Thank you. This concludes today’s meeting. We appreciate your time and participation. You may now disconnect.